Strategy of U.S. Anti-Russia Sanctions Becomes Clearer

On Friday, April 6th, Reuters headlined “Russian businessmen, officials on new U.S. sanctions list”, and opened: “The United States on Friday imposed major sanctions against 24 Russians, striking at allies of President Vladimir Putin over Moscow’s alleged meddling in the 2016 U.S. election and other ‘malign activity’. Below are the most prominent businessmen targeted along with their main assets and connections as well as extracts from the U.S. Treasury statement.”

As that Reuters list makes even clearer than before, U.S. economic sanctions against Russia are focused against mainly the following four categories of targets in Russia:

1. Russian competitors to America’s largest international oil companies. These specific U.S. firms were listed, on March 27th, in an excellent article by Antonia Juhasz in Pacific Standard magazine, “INSIDE THE TAX BILL’S $25 BILLION OIL COMPANY BONANZA: A Pacific Standard analysis shows the oil and gas industry is among the tax bill’s greatest financial beneficiaries.” There, they were listed in rank order. For example: the largest such firm, Exxon/Mobil, was given $5.9 billion in “2017 Tax Act Savings,” and the second-largest, Philipps 66, won $2.7 billion in it. The latest round of anti-Russia sanctions focuses clearly against these international U.S. oil firms’ Russian competitors.

However, previous rounds of U.S. sanctions have especially focused against:

2. Russian competitors of Lockheed Martin and other international U.S. weapons-firms — Russian manufacturers that are selling, to foreign governments, military aircraft, missiles, and other military equipment, on the international markets: competing military products. The competitive purpose of these sanctions is to boost not U.S. international oil-firms, but U.S. international weapons-firms.

3. Russian banks that lend to those firms. Some of these banks have also other close ties to those firms.

4. Russian Government officials, and billionaires, who cooperate with Russia’s elected President, Vladimir Putin. Putin refuses to allow suppliers to the Russian military to be controlled (such as are the military suppliers to America’s Government) by private investors (and especially not by foreigners); he wants the weapons-manufacturers to represent the state, not the state to represent the weapons-manufacturers; i.e., he refuses to privatize Russia’s weapons-producers, and he instead insists that all firms that supply Russia’s military be controlled by Russia’s elected Government, not by any private investors. (By contrast, The West relies almost entirely upon privately owned weapons-makers.) He also prohibits foreign interests from controlling Russia’s natural resources such as oil firms, mining, and land-ownership, and this explicitly applies even to agricultural land. However, most important are Russia’s Strategic Sectors Law (otherwise known as “Strategic Investment Law”), which defines as a “Strategic Entity” and thus subject strictly to control only by the Russian Government and citizenry, four categories: Defense, Natural Resources, Media, and Monopolies. Russia’s refusal to allow U.S. billionaires to buy control over these — to buy control over the Government — is, to a large extent, being punished by the U.S. anti-Russia sanctions.

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Focusing on the latest round: The Reuters article lists the specific main targets of the new sanctions. These targets are, as described by the U.S. Treasury Department, and as quoted by Reuters:

“Oleg Deripaska is being designated … for operating in the energy sector of the Russian Federation economy.”

“Viktor Vekselberg is being designated for operating in the energy sector of the Russian Federation economy.”

“Kirill Shamalov is being designated for operating in the energy sector of the Russian Federation economy.”

“Andrei Skoch is being designated for being an official of the Government of the Russian Federation.”

“Suleiman Kerimov is being designated for being an official of the Government of the Russian Federation.”

“Vladimir Bogdanov is being designated for operating in the energy sector of the Russian Federation economy.”

“Igor Rotenberg is being designated for operating in the energy sector of the Russian Federation economy.”

Those are the ones that the Reuters article specifically listed. In addition, there are:

DESIGNATED RUSSIAN GOVERNMENT OFFICIALS

Andrey Akimov, chairman of the board at Gazprombank

Andrey Kostin, president of VTB bank

*Alexey Miller, chief executive of Gazprom

Mikhail Fradkov, president of the Russian Institute for Strategic Studies

Sergey Fursenko, member of the board of directors of Gazprom Neft

Oleg Govorun, head of the Presidential Directorate for Social and Economic Cooperation with the Commonwealth of Independent States Member Countries

Gazprom is Russia’s oil-and-gas giant; and, likewise in accord with Putin’s demand that national-security industry remain under state-control instead of control by private investors, its controlling investor is the Russian Government. However, a few individuals are listed who are simply Russian Government officials, presumably likewise more cooperative, with carrying out the intentions of the elected President, than the U.S. and its allied governments consider to be acceptable.

Clearly, the special focus of these sanctions is on supporting U.S. international oil firms competing against Russian international oil firms.

The United States added Russian officials and energy firms to a sanctions blacklist on Friday, days before details of further possible penalties against Moscow are due to be released.

…

A Treasury Department spokesperson said the department is “actively working” on reports required under the “Countering America’s Adversaries Through Terrorism Act” and aimed to release them consistent with timelines in the legislation.

Trump or his Treasury Secretary were actually responding to pressure from “Democrats” and unnamed others; but, when the final statement from the Treasury was issued on January 29th (and largely ignored by the press), it turned out that no new sanctions were issued, against anyone. The billionaires’ lobbyists had achieved nothing more than to provide (via the anti-Russia verbiage from members of Congress) to the American public, yet more anti-Russia indoctrination in support of America’s war against Russia; but, this time, no real action was taken by the President against Russia.

Since the Soviet period, the United States has targeted Russia with numerous sanctions. The primary ones currently in effect were instituted over human rights violations and the conflict in Ukraine. In late 2012, the United States expanded its Soviet-era sanctions over human rights and approved the Magnitsky Act to punish those deemed responsible for the death of Russian tax accountant Sergei Magnitsky, a whistleblower who investigated Kremlin abuses and a tax-fraud scheme. The act penalizes dozens of people believed to be involved in the case, but the measure has evolved into a platform for the United States and its allies to punish Russia for a much wider scope of human rights abuses.

The Ukraine sanctions imposed by the United States (and, to a lesser extent, by the European Union, Canada, Australia and Japan) stem from Russian involvement in the conflict there and includes the conflict in eastern Ukraine, Russian support of the previous government, the downing of Malaysia Airlines Flight 17 and the annexation of Crimea. Those penalties include:

• Limits on debt issuance to Russia’s six largest banks, four primary state oil firms and four state defense firms.

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